Authors : Richard Antonin Doffonsou, Francis Jony Andrianarison
The international and regional situation influenced Cameroon’s economic performance in 2016. Several events have had an impact on economic activity and trade in goods and services: the oil crisis, the regional security crisis in the far north of the country, and the competitive devaluations of the Nigerian currency. Nevertheless, the economy has been resilient. Growth was an estimated 4.7% in 2016, down from close to 6% in 2014 and 2015. Fiscal policy was moderately expansionary, with major infrastructure projects continuing. The budget deficit grew to 3.3% of GDP in 2016, up from 2.5% the previous year. Cameroon continued to diversify its economy through agricultural and forestry value chains.
In line with the direction of fiscal policy, monetary policy remained somewhat expansionary, as it had been in previous years, leading to a 9.2% increase in the money supply, which reached XAF 3.97 trillion (CFA Franc BEAC) in August 2016, up from XAF 3.64 trillion a year earlier. France, Germany, Nigeria and the People’s Republic of China account for 80.4% of Cameroon’s external trade, so their slow economic recoveries affected Cameroon’s current-account balance, with the deficit reaching an estimated 4.8% of GDP in 2016, compared with 4.2% in 2015. Net foreign assets stood at XAF 1.54 trillion in August 2016 (equal to around five months of imports), down 5.5% from XAF 1.62 trillion a year earlier. Inflation fell from 2.7% to 2.2%, and is expected to remain below the 3.0% convergence threshold of the Central African Economic and Monetary Community (CEMAC) in the medium term. Cameroon’s medium-term growth prospects remain good, with projections of 4% to 5%. Growth will be driven by the non-oil sector and will enjoy the benefits of economic diversification policies and investment incentives. The country’s economic performance in recent years is reducing poverty. The poverty rate fell by 2.4 points between 2007 and 2014.
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